Starbucks to Accept Square Mobile Payments

The surge in smartphones from Apple (NASDAQ:AAPL[1]) and those powered by Google’s (NASDAQ:GOOG[2]) Android OS makes it seems inevitable that these devices will replace the traditional wallet.

In a move that likely will accelerate this trend, Starbucks (NASDAQ:SBUX[3]) has partnered with Square[4], a top player in mobile payments technologies. The deal includes a $25 million investment — at a $3.25 billion valuation — as well as a board seat for Howard Schultz.

Starbucks already has a popular payments app, which handles about $1 million a week. There is no plan to replace it. Instead, Square will be another option for customers.

The app’s eventual functionality sounds pretty cool. As reported by The New York Times:

“But when Starbucks uses Square’s full GPS technology, the customer’s phone will automatically notify the store that the customer has entered, and the customer’s name and photo will pop up on the cashier’s screen. The customer will give the merchant his or her name, Starbucks will match the photo and the payment will be complete.”

It’s that easy.

The Starbucks deal should give Square a huge boost toward getting traction, and in fact could be key in achieving mainstream adoption of mobile payments as a whole.